Meaning:

Men, material and money are regarded as the three important factors of production. Human beings constitute the organisation at all levels and are regarded as the only dynamic factor of production. A business unit comes into existence with certain well defined objectives. An effort is made by the management to co-ordinate human and material resources in such a way that the objectives of the business are achieved.

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It is not very difficult to handle material resources like plant, machinery, stock etc., but without the efficient use of human resources, management can never accomplish objectives of the business. Even in those industries where latest technology has been introduced, human beings are still regarded as a dominant factor for increasing the profitability.

It the words of Rensis Likert, “All activities of any enterprise are initiated and determined by the persons who make up that institution. Plants, offices, computers, automated equipments and all else that a modern firm uses are unproductive except for human effort and direction. Of all the tasks of management, managing the human component is the central and most important task, because all else depends on how well it is done.”

In order to get the best results from the people, management must be aware of as to what the employees expect from a business enterprise. The needs of human beings may be classified as physical, social and egoistic.

Physical needs refer to basic necessities of life without which an individual can’t live such as food, shelter and clothing. Social needs, on the other hand, refer to an environment on the job where he is recognised as an individual. His morale increases if the individual is identified with a small group or a team.

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Man is a social animal and feels unhappy if his companions treat him unfairly. Egoistic needs include praise for work, recognition and importance of work, etc. It is for the management to ensure that all the employees get economic, social and individual satisfaction.

It is very important for the management to understand that human beings play a vital role in every business enterprise. Other factors of production are worthless without the human factor.

According to Dale Yoder “The development, allocation, utilisation and conservation of human resources through their employment, is a continuing inevitable process in modern societies.” In the words of Aldrich, “personnel management is just like a nervous system of human body.” The nearest analogy is in the human body Personnel Management is not the brain, the controller, nor only just a member, nor yet the blood stream, the energising force; it is the nervous system.”

Definition:

Personnel management is that area of management which is concerned with people at work and their interpersonal relations. The various other terms used for Personnel Management are ‘Personnel Administration’, ‘Labour Management’ ‘Industrial Relations,’ ‘Labour Relations,’ ‘Manpower Management’ and ‘Employee Relations.’

To understand the exact meaning of the term personnel management and its scope, we can analyse the following definitions formulated by eminent scholars on management science:

1. “Personnel management is concerned with the obtaining and maintaining of a satisfactory and a satisfied work force.” —George R. Terry

2. “Personnel management is an extension of general management that of promoting and stimulating every employee to make fullest contribution to the purpose of the business.” —H.N. North Scott

3. ‘Personnel Management is that aspect of management having as its goal the effective utilisation of the labour resources of an organisation”. —Paul G. Hastings

4. “Manpower management is the function of activity aiding and directing working men and women in maximising their contributions and satisfaction in employment. It helps workers including all those who work, from unskilled common labourer to corporation president to public administrator-combine their efforts with those of others in providing the services and products we all want”. —Dale Yoder

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5. “The personnel function is concerned with procurement, development, compensation, integration and maintenance of the personnel of an organisation for the purpose of contributing towards the accomplishment of that organisation’s major goals or objectives. Therefore, personnel management is the planning, organising, directing and controlling of the performance of those operative functions.

—Edwin B. Flippo

6. “Personnel Management is an integral but distinctive part of management, concerned with people at work and their relationship within the enterprise, seeking to bring together inter effective organisation men and women who staff the enterprise, enabling each to make his own best contribution to its success, both as an individual and as a member of a working group. It seeks to provide relationships within the enterprise that are conducive both to effective work and human satisfaction”.

—U.K. Institute of Personnel Management

Characteristics:

From the various definitions given above, the following important characteristics emerge, which also explains its nature:

(a) It is concerned With Employees:

Personnel management is a management of human resources. It is primarily concerned with the efficient utilisation and conservation of these resources. It considers employees as individuals and also as a member of a group.

A cordial environment is created in the enterprise where each employee contributes his maximum for the achievement of organisation’s goals. It becomes possible because each employee is treated on equitable basis and is given humane treatment.

(d) It is of a Continuous Nature:

The personnel function is of a continuous nature “It cannot be turned on and off like water from a faucet; it cannot be practised only one hour each day or one day a week. Personnel management requires a constant alertness and awareness of human relations and their importance in every day operations” (George R. Terry)

(e) It Ensures Economic,Social and Individual Satisfaction:

Personnel management is mainly concerned with the satisfaction of physical, social and egoistic need of the employees at all levels covering both ‘blue-collar’ and ‘white-collar employees.